Cenovus Energy Inc. plans to spend $2 billion on oil sands projects and other operations in 2011, much of it to lay the groundwork for future projects.
The Foster Creek oil sands development is expected to increase production by 2% in 2011.
Photo: Cenovus Energy
CALGARY: Cenovus Energy Inc. plans to spend $2 billion on oil sands developments and other operations in 2011, much of it to lay the groundwork for future projects.
The Calgary-based energy company said $1.8 billion will go into the construction of approved expansions and current operational activities, and another $500 million has been designated for the development of conventional assets and emerging oil projects. Only a quarter of the capital will go to projects that will be producing in 2011.
“We’ve established our 10-year strategy to develop our oil sands assets, to double net asset value in five years and to pay a strong and increasing dividend,” said Brian Ferguson, president CEO of Cenovus, which was split from Encana Corp. last year. “Our 2011 budget sets us on the path to achieving these goals. Investments made now and over the next few years will continue to unlock the value of the vast oil resource in Cenovus’s portfolio.”
The company said most of about $750 million will be spent on continuing expansion at the Christina Lake and Foster Creek oil sands developments. It expects Foster Creek to increase its average annual production by about 2% next year.
“As a result of receiving Alberta Energy Resources Conservation Board approval this fall for an expanded development area for our Foster Creek project, combined with an overall increased recovery factor in the area, we believe we will be in a position to add at least 200 million barrels of proved reserves for our Foster Creek lands at year end 2010,” Ferguson said.
Technology innovation and energy efficiency will get $65 million. Cenovus said it has 50 R&D projects on the go “at all times” and it plans to introduce at least one new commercial technology to its operations every year.